Thursday, August 12, 2010

Good Democracy May In Fact Be Good

Dani Rodrik has a very interesting article about whether or not democracies grow faster than authoritarian regimes, but I’m afraid—probably more due to space constraints than anything else—that it has a bit of imprecision that’s worth dwelling upon:

The relationship between a nation’s politics and its economic prospects is one of the most fundamental – and most studied – subjects in all of social science. Which is better for economic growth – a strong guiding hand that is free from the pressure of political competition, or a plurality of competing interests that fosters openness to new ideas and new political players?

East Asian examples (South Korea, Taiwan, China) seem to suggest the former. But how, then, can one explain the fact that almost all wealthy countries – except those that owe their riches to natural resources alone – are democratic? Should political openness precede, rather than follow, economic growth?

When we look at systematic historical evidence, instead of individual cases, we find that authoritarianism buys little in terms of economic growth. For every authoritarian country that has managed to grow rapidly, there are several that have floundered. For every Lee Kuan Yew of Singapore, there are many like Mobutu Sese Seko of the Congo.

The obvious question that suggests itself is: well, what’s the ratio of Mobutus to Lee Kuan Yews? Because surely there are democracies that have failed and succumbed to problems. You might say that the characteristics of a failed democracy are these: a willingness to pander to interest groups, succumbing to the tyranny of the majority, populism.

The problem with Rodrik’s piece is that it is unable to define democracy in the correct way: his definition apparently is “good democracy is good.” That’s oversimplifying, but let’s note the virtues of democracy that he describes: “…a plurality of competing interests that fosters openness to new ideas and new political players” and “more equitable societies” and so on and so forth; his point is that it’s really good to be a good democracy. The problem here is a lack of a good counterfactual: all of the world’s richest countries (at least, the ones that aren’t resource-endowed) are democracies (note: as Rodrik points out, China is both rich and not rich—on a per capita basis adjusted for purchasing power, Namibia is slightly richer than China.)

We could consider governments among poorer nations and sort them into authoritarian and democratic, but that leaves the very real problem of definitions. While we don’t want to fall into the good democracy is good trap, you also have to admit that there’s a certain baseline quality that distinguishes democracies from dysfunction. So the challenge for someone like Rodrik (and, indeed, the people who would prefer the world universally adopted a liberal democratic system—I’m assuming that this includes most of my readers besides me) is to figure out what is the very worst democracy and compare that to authoritarian government, and to calculate the benefits of democracy thusly.